GM’s profit for the year has been cut to more than 50% due to recalls, but sales are up for its vehicles
A net profit of $2.8 billion was made by GM last year in which it sold more than 9.9 million vehicles comprising of cars and trucks. It is rather bad that General Motors also broke the record for most vehicle recalls in a year. If it was not for that GM might have ended up with another $3.5 billion in profit.
Well, this was the amount that GM had to shell out on 80 plus recall campaigns which involved a total of 36 million automobiles made by the company. However this amount does not include the ignition switch compensation fund amounting to $315 million, and the process has involved 51 deaths so far and the company had made a payout of $39 million.
However, in spite of the frequent recalls that hit 2014 did not deter the Americans from buying GM vehicles amounting to 2.9 million, which is a gain of 5.3 percent over 2013. That is a lot of cash and GM has lots of them when it comes to it. It has a reserve of $3 billion in cash or cash equivalents and has access to a credit of a further $5.3 billion. GM can draw the amount without any delay when needed.
There are 49 states in the US investigating GM and so is the Department of Justice. The Renaissance Center is swarmed with people demanding potential damage worth billions, and it has not changed anything at home and it seems quite peachy there. It is great; actually the sales of GM of grew up to 18.3% last month compared to the same month in 2014. The new Escalades selling double of last year and Chevrolet ranked in the best sale at the retail since 2008. After 2004, this is the best for GMC too, and an average of $2400 is being spent more on the GM vehicles by people this year.